European/Swedish investor - Help with a lazy portfolio

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tna
Posts: 4
Joined: Fri Jun 07, 2013 2:08 am

European/Swedish investor - Help with a lazy portfolio

Post by tna » Fri Jun 07, 2013 2:25 am

I'm located in Sweden have just currently started investing at the age of 27. I've read the boglehead book, three fund portfolio thread and the current topics about europeans investing using it. What I'm lacking is how to set up the portfolio in real life.

My current portfolio holds:

50 % Avanza zero (0% exp.r.) - Tracks SIX30RX, the 30 largest companies in the Stockholm exchange. (Sweden is a large exporter so lots of exposure to the world economy)
50 % Danske invest global index (0,5% exp. r.) - Tracks MSCI World Free.
0 % bonds

What am I lacking, besides the bonds? What bond funds would you gals/guys recommend?

Am I getting a diversified exposure to the world economy with this setup?

allsop
Posts: 1046
Joined: Sun Jun 15, 2008 7:08 am

Re: European/Swedish investor - Help with a lazy portfolio

Post by allsop » Fri Jun 07, 2013 12:41 pm

Welcome to the forum!

I'm living in Sweden as well and over the last few years there have been a marked improvement in offering index funds with ER of 0.4% and lower.

You can use SPP Aktiefond Global (ER 0.3%) that is a no-load index fund that follows the broader MSCI AC World as of this year as a replacement for Danske Invest Global Index. The fund is available on Avanza, Nordnet or directly from SPP Fonder (www.spp.se).

Most of my fixed income is in taxable account and I use FDIC insured CD's (Swedish: fasträntekonto med insättningsgaranti) ranging from 1 to 3 years as the rates are very good now (around 3%) with inflation around 1%. This site is useful for finding good offers: http://www.compricer.se/sparande/

Both AMF and SPP have money market funds and bond funds with ER 0.2% or less.

Sweden is a small country representing about 1% of world equity, so I think that 50% in Swedish equity is a bit much.

tna
Posts: 4
Joined: Fri Jun 07, 2013 2:08 am

Re: European/Swedish investor - Help with a lazy portfolio

Post by tna » Fri Jun 07, 2013 3:20 pm

Nice to find a fellow swede on this board!

I belive you might be correct about the 50-50 world/swe allocation. What might be a better allocation, 80-20? I will probably use SPP global from now on because of the expense ratio.

As for bonds I'm currently holding cash in a high yield savings account (2,25%) as an alternative. This feels like a decent alternative for the moment.

hafius500
Posts: 217
Joined: Sat Sep 10, 2011 4:31 pm

Re: European/Swedish investor - Help with a lazy portfolio

Post by hafius500 » Fri Jun 07, 2013 3:25 pm

I agree with allsop. 50/50% Sweden /World is a little bit concentrated.
I recall Nokia and Ericsson in 2000...

9 lazy portfolios for UK investors
A UK blogger who quotes several model portfolios of diverging complexity.

I like No. 8 as a starting point: Harry Markowitz’s ‘In Real Life’ Portfolio

50% ... MSCI World ETF ...
50% Vanguard UK Gov Bond Index.(I.e., domestic bonds for Non-Uk investors).

For a Non-US investor the World Index is concentrated in terms of currency exposure. IMO it may be understandable if you add another regional fund (although I'm not sure if it makes a difference over the long haul).
Do not forget Emerging Markets (~10%). IMO dollar-cost-averaging may be an option to invest a lump sum here.

According to the Swedish website of Vanguard several ETFs have been registered in Sweden although they may not been tradable in Sweden.
Other ETF companies, like iShares Sweden, may be an alternative option.

I can't read the Swedish iShares website, but, to my knowledge, iShares does not offer "true" European small-cap funds, and the only value-tilted fund is the Euro large-cap value fund. If you want to "tilt", your options are limited.
prior username: hafis50

tna
Posts: 4
Joined: Fri Jun 07, 2013 2:08 am

Re: European/Swedish investor - Help with a lazy portfolio

Post by tna » Fri Jun 07, 2013 4:15 pm

Lets not forget the emerging markets! I thought I was exposed to these with the global fund. Right now Im leaning towards something like the following:

65% SPP Global. Tracking Msci world. 0% fee.
20% AVANZA ZERO. Tracking SIX30RX, the 30 largest companies in the Stockholm exchange. 0% fee.
10-15% SPP emergin sri. Tracking msci world emerging. 0, 95% fee. I sadly can't find anything cheaper.

allsop
Posts: 1046
Joined: Sun Jun 15, 2008 7:08 am

Re: European/Swedish investor - Help with a lazy portfolio

Post by allsop » Fri Jun 07, 2013 6:54 pm

tna wrote:Lets not forget the emerging markets! I thought I was exposed to these with the global fund. Right now Im leaning towards something like the following:

65% SPP Global. Tracking Msci world. 0% fee.
20% AVANZA ZERO. Tracking SIX30RX, the 30 largest companies in the Stockholm exchange. 0% fee.
10-15% SPP emergin sri. Tracking msci world emerging. 0, 95% fee. I sadly can't find anything cheaper.
The SPP Aktiefond Global (ER 0.3%, not 0%, sadly) tracks MSCI AC World Net Return that includes emerging markets (about 10%) so no need for the SPP EM fund, unless you want to overweight EM.

allsop
Posts: 1046
Joined: Sun Jun 15, 2008 7:08 am

Re: European/Swedish investor - Help with a lazy portfolio

Post by allsop » Fri Jun 07, 2013 7:14 pm

hafius500 wrote: According to the Swedish website of Vanguard several ETFs have been registered in Sweden although they may not been tradable in Sweden.
Other ETF companies, like iShares Sweden, may be an alternative option.

I can't read the Swedish iShares website, but, to my knowledge, iShares does not offer "true" European small-cap funds, and the only value-tilted fund is the Euro large-cap value fund. If you want to "tilt", your options are limited.
Available small-cap mutual funds are expensive and I do not invest in them.

tna
Posts: 4
Joined: Fri Jun 07, 2013 2:08 am

Re: European/Swedish investor - Help with a lazy portfolio

Post by tna » Sat Jun 08, 2013 1:23 am

Thanks everyone. I think this will be a good basis for a lazyish portfolio.

NOLA
Posts: 327
Joined: Sun Jul 10, 2011 1:23 pm

Re: European/Swedish investor - Help with a lazy portfolio

Post by NOLA » Sat Jun 08, 2013 9:04 pm

Good to see another Swedish Boglehead on here, although I reside in the U.S. Just wanted to wish you good luck and say Tjena. I think its pretty cool how Avanza offers the 0%ER OMX fund.

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